Brussels' outs

Cameron’s threat of a referendum is enough to destabilize the sneaky EU machine

January 26, 2013
Obsession
Euro Crunch
January 26, 2013

Inner conviction has nothing to do with British politicians’ desire to reform the relationship with the European Union. Election tactics do. But if that is what it takes to trim a tree with far too many branches, it is still a good thing. Even so, UK Prime Minister David Cameron needs European allies to pull it off.

Cameron has been hesitating about Europe for years, and his landmark speech this week for an in-out referendum in 2017 boils down to party politics. Cameron’s main opponent, Labour’s Ed Miliband, portrays the initiative as submission to the diehard EU-opponents in Cameron’s Conservative party. That amounts to cock-fighting. Their view is pretty much neutralized by those who quite uncritically embrace most EU initiatives. Both are minority factions. Rather, Cameron’s proposal submits to the majority both within his party and among the voters—and their attitude to EU is ambivalent.

The UK Independence Party (UKIP), a right-wing party of discontent, is also part of the tactical equation. Amid the euro crisis (and the EU’s weakened position), UKIP has won voters from all established parties but especially from the Conservatives. That means right-wing vote-splitting potentially could decide the next election.

Voters unhappy with a debate (one lacking nuance anyway) no longer have to vote for UKIP to avoid swallowing every pill sent from Brussels. This might mean less defection and probably also that Cameron is right when saying he has chosen the road necessary to maximize continued British-EU support.

In doing so, David Cameron has certainly raised the election stakes but he has more to gain than to lose. Labour comfortably leads in opinion polls and, secretly, Cameron is probably well aware that the economy is not likely to grow significantly before the next election (2015). Yesterday brought the news that the UK’s GDP shrank by 0.3% in the last quarter of 2012, triggering fears of a triple-dip recession.

Why do the Brits resent the European Union?

One of the two main founding principles of the EU is the establishment of a free common market. Many Brits feel tricked by the stream of laws and regulations and the related administrative hassle from Brussels, denting the so-called mission of “freedom.”

Add the massive state intervention connected to the euro, including artificially low-interest rates, limitless bank guarantees, bailout after bailout, the eurobond manoeuvring, as well as the transfer of funds from the relatively more sound economies in northern Europe to the “southern spenders.” Add also the gigantic agricultural subsidies—a staggering 40% of the total EU budget. It is highly likely that Europe already has captured the Japanese disease with a prolonged period of tedious “nothingness”—besides ever-growing debt. Other economic factors influencing a British government is that Britain is both a net EU importer and net EU contributor.

Nevertheless, collectively, the European Union is still the by far most important UK trading partner. This means economic interests are two-sided. Ed Miliband and even Cameron’s coalition partner Nick Clegg attack the prime minister by saying that foreign business partners will look twice before investing in Britain if its EU future is uncertain. They do have a case but not a terribly strong one. Even in the event of an exit, the United Kingdom would maintain some sort of business relation with EU.

It is easy to argue that it still is in the best interest of the United Kingdom to stay within the EU but – and this is crucial – much more so if the EU slims rather than expands its political and administrative ambitions. Otherwise it might be wiser for Great Britain to redirect a sizable portion of its attention to large markets with growth potential. Under present circumstances this might not mean the US but emerging markets such as India, with which Great Britain already enjoys a special relationship.

And then there’s second motive behind the formation of the European Union: security. The island nation of Britain has always had a different relationship to the continent than its other strong countries. Today’s weapons technology renders the UK’s geography less important. However, Great Britain regards USA and NATO as its prime guarantors of peace. That includes the diminishing number of Brits who still consider it important to rein in Germany.

A matter of trust

Further, the attitude towards unyielding EU advocates is probably much more influenced by a completely different factor: trustworthiness.

For years, the EU has expanded “sneakily” with an obvious unwillingness to consult the will of the people. Meanwhile, the union’s powers-that-be have made sure that the number of EU jobs as well as personal remunerations have grown steadily. As a consequence, trust has deteriorated considerably. It is no less worrying when EU representatives pretend as if personal agendas have not played any part in either the history of constant EU institutional growth or in the current EU debate. Such denial is not only irritating but also generates worry that there is no counterweight to future expansion hunger.

Will the Brits even vote?

Here’s the other truth: It is highly uncertain that the referendum planned by Cameron will ever take place – unless the EU throws gas on the fire by openly trying to expand its powers even further.

Conservatives first have to win the next election by a majority. This seems unlikely. Opponents will now work frantically to regain lost ground. Also, the EU is the prime concern only for politicians, business leaders and academics – and not even for all of them. The vast majority of Brits care more about more tangible issues such as schools and hospitals. Moreover, some will agree with Cameron’s middle-way course but (for good reason) question his inner conviction and determination to really see this through. It could very well happen that Labour and the Liberal Democrats form the next coalition government – and then use their EU proximity as one of their moral alibis.

The EU machinery has for years communicated the self-interested mantra that it is necessary to succumb to established EU form and, preferably quietly, raise all concerns around the EU negotiating table. It has never been mentioned that positive negotiating results rest on a genuine will to discuss, identify and rectify problems. When Cameron previously has presented deviating opinions at EU negotiating tables he has been met with not only empty high-flown phrases but also contempt (after one meeting, the French president refused to shake hands).

The European Union does not display a genuine willingness to change course. For years the same old tune has been played in which the lyrics ensures that all problems will be solved by yet more laws, yet more reorganisations and yet deeper political involvement (banking union, fiscal pacts, growth pacts, new entities for supervision, EU finance minister, EU foreign minister…).

Machineries of power have never reformed from within, at least not more than cosmetically. Stronger pressure is needed. Cameron has applied it.

Cameron can’t go it alone

He will hardly have his way as long as he is the only EU head of government who is applying such pressure. The EU has a vast public relations-budget at its disposal and a long line of people paid to play its tune—in every EU country.

Part of this machinery (especially Paris) already portrays David Cameron as a misguided isolated heretic. This portrayal could top the message chart for years to come. If that happens, it will feed the British discontent and improve Cameron’s possibilities to overcome the odds and actually win the next British election by a majority. That would mean that his demands for renegotiation will be taken to Brussels. In such a scenario, it might be the EU politicians who refuse to join the negotiating table they usually so love. These politicians will be well aware that if they actually return some powers to Britain, other countries are likely to make similar demands.

If positions are locked, the United Kingdom will be heading for the exit. That would hurt both the UK and the EU. In fact, it might lead to the total breakdown of EU, not because the UK market is indispensable to the EU (it is not) but because it would be the end of an indispensable initiative to reform the EU.

A more positive scenario is that one or a few other European Union government leaders join forces with the United Kingdom. Thereafter, the isolation argument would not work. That could kickstart an inner alliance of “healthily skeptic EU friends.” Such an alliance—of, say, Great Britain and export nations heavily dependent on maintained competitiveness such as Sweden, Finland, the Netherlands, Czech Republic—would have to be taken more seriously in Brussels.

There is just a chance that the wind slowly might be blowing in that direction. While Paris reacted with its usual scolding, the more politically astute Angela Merkel has sent Cameron a somewhat more forgiving signal. Undoubtedly she is well aware that European Union skepticism is not limited only to Britain. If even German politicians are forced to acknowledge this, it will be much easier also for others to follow. The sluggishness of a power giant should not be underestimated. In the end, it might be a similar logic as in Britain that really sets things in motion: politicians who somewhat unwillingly try to appease voters skeptical of the EU in order to stay in power. That would give David Cameron his sorely needed allies.

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